New Telkom management remains committed to KSO contracts<\/p>\n
JAKARTA (JP): The new management of the state-owned telecom
\ncompany PT Telkom said on Monday that it remained committed to
\nits contract agreement with multinational partners in the Joint
\nOperation Scheme (KSO).<\/p>\n
The company's new director of operations and marketing
\nKomarudin Sastrakoesoemah said that new management had no
\nintention of annulling or changing the contracts despite
\ndisagreement with some of the provisions.<\/p>\n
"The scheme will be continued until it expires in 2010. We are
\ngoing to stick to the original contract," he said.<\/p>\n
He stated that Telkom intended to resolve demands made by KSO
\npartners to review the contract in order to make it more
\nfinancially and operationally feasible for both the KSO investors
\nand Telkom.<\/p>\n
Komaruddin said that the new management would stick to the
\ngovernment's existing guidelines in its relations with KSO
\npartners.<\/p>\n
"The form of cooperation may well be changed from joint
\ncooperation into a joint venture partnership as initially
\nproposed by KSO partners," he said. But he added that the new
\nmanagement had not yet discussed the matter with KSO partners.<\/p>\n
Telkom and the KSO partners have been engaged in tough
\nnegotiations since November, trying to solve their differences,
\nbut haven't been able to reach an agreement thus far.<\/p>\n
Telkom and its five KSO partners have been embroiled in a
\ndispute over the management and operation of Telkom's work areas.
\nThey were put under the management of the partners in 1996.<\/p>\n
Telkom appointed the partners in 1996 to finance, build and
\noperate domestic fixed line telephone services across the country
\non behalf of Telkom under a revenue-sharing scheme through 2010.<\/p>\n
The five KSO partners are PT Pramindo Ikat Nusantara, which
\noperates in Sumatra, PT AriaWest International in West Java, PT
\nMitra Global Telekomunikasi Indonesia in Central Java, PT Cable &
\nWireless Mitratel in Kalimantan and PT Bukaka Singtel
\nInternational in eastern Indonesia.<\/p>\n
Telkom controls the most profitable markets in Jakarta and
\nEast Java.<\/p>\n
Under the 1996 agreement, the KSO partners were required to
\ninstall a total of two million new access line units (ALU), from
\n1996 to 1999.<\/p>\n
The government revised the figure to only 1.2 million in 1998
\nin the midst of the economic crisis. The partners, however, have
\nbuilt 2.82 million lines-in-service as of Dec. 1999.<\/p>\n
The agreement also required the partners to pay Telkom a
\nmonthly fixed amount, known as minimum Telkom revenue (MTR), and
\ndistributable Telkom revenue (DTR) amounting to 30 percent of
\ntheir total revenue.<\/p>\n
The partners said they paid Telkom approximately 45 percent,
\nor Rp 5.03 trillion (US$718 million), of the total revenue
\ncollected from early 1996 to March 1999.<\/p>\n
The KSO partners have been demanding significant changes in
\nthe contract provisions in order to make it more feasible for
\nforeign investment. They are also seeking a satisfactory
\nresolution to their differences on the partners' rights and
\nobligations.<\/p>\n
Komarudin said the disagreement over the rights and
\nobligations of both parties was mainly due to both parties'
\nfailure to consistently comply with the contract.<\/p>\n
The partners have threatened to put their major investment and
\ndevelopment of new lines on hold until a mutual and significant
\nagreement is achieved with Telkom. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-telkom-management-remains-committed-to-kso-contracts-1447893297",
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"sponsor": "Okusi Associates",
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